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Vodafone Hit By £6bn Eurocrisis Phone Bill

Vodafone has suffered a £492m half-year loss after being hit with a multibillion write-down in the value of its business in crisis-hit southern Europe.

The telecoms giant announced a £5.9bn write-down in Spain and Italy, which prompted a 2.46% fall in its share price.

Vodafone's pre-tax loss for the six months ending September 30 compared to a profit of £8bn in the same period last year.

It was hit by customers making fewer calls in the economically-depressed southern region, along with the weakening of currencies in its major markets.

It was also hit by a partial slowdown of growth in emerging markets such as India and South Africa.

"We have continued to make progress on our strategic priorities over the last six months, with good growth in data and emerging markets in particular," chief executive Vittorio Colao said.

"In the short-term, however, our results reflect tougher market conditions, mainly in southern Europe."

However the Berkshire-based firm has been helped by the strong performance of its joint venture Verizon Wireless in the United States.

It said it expected to get a £2.4bn dividend from Verizon Wireless by the end of the year and added it would start a £1.5bn share buyback programme.

Vodafone owns 45% of Verizon Wireless while Verizon Communications owns the other 55% in the joint venture.

The UK company has also come under fire for its tax arrangements, just a day after three leading US multinationals felt the wrath of UK politicians.

Speaking to Sky News, Mr Colao told Jeff Randall Live: "We do pay and we will pay whatever corporation tax the rules require us to pay and I don't think there's any dispute over that."

"I'm absolutely in favour of making sure there's no avoidance and I'm absolutely in favour of making everybody pay the right amount of tax."

Group service revenue, which reflects ongoing income and not one-off items such as handsets, was down 1.4% in the second quarter.

Vodafone was hit by the drop of 11.3% in southern Europe business while the downturn in northern Europe was 0.7%.

The negative result was buoyed slightly by growth sustainment of 4.1% in its emerging markets.